Andy McKay, founder of the firm’s owner Ibiza Rocks Group, said: “As the Ibiza Rocks Group expands with exciting new hotel and event projects in Ibiza and beyond, our strategic agenda has changed and the time is right for us to move on at the end of the summer season.

“We are really proud of what we have brought to the Mallorcan resort of Magaluf but we are pulling out of the resort in September.

“We will concentrate on building our Ibizan infrastructure and our global expansion plan and feel this is the right movement at the right moment for the Ibiza Rocks brand.”

It is understood the decision to cease activity in Magaluf was taken before the furore broke out over footage of a 21-year-old Northern Irish girl performing a sex act on 24 men in a bar.

But it is likely to compound fears voiced by nightlife workers of an exodus by big tour operators following the controversy.

Managers, DJs, reps and bar staff, most of them British, claim that they have all been tarred with the same brush over the actions of one independent pub crawl organiser.

And they complained that local authorities are targeting bars that bring money to Majorca rather than tackling problems such as street prostitution and muggings.

The manager of one of the best-known brands on the strip, Alex’s Bar, said that it was unfair that well-run establishments where sex games do not take place should suffer the consequences.

Nathan Dilks, 32, who has lived on the Spanish island for 12 years but is originally from Portsmouth, said that “legit operators” such as Thomas Cook, Escapade and Majorca Rocks may pull next year if the authorities come down too hard.

“We spend a lot of money year after year paying the tour operators money to bring people to our bars.

“With the changes the local government wants to introduce it’s going to cost the tour operators in the region of three to six thousand euros a week to run those bar crawls.

“They can’t afford to do that, that’s their profit, so if the government goes ahead all those tour operators could pull out of the resort. It would be terrible for the resort.”

Asked about the Carnage Magaluf pub crawl, where the video was filmed, Mr Dilks said that it was run by the owners of “three or four” establishments on the strip who only use their own bars.

“It’s a good business for them because they get all the money from the tickets and they get the crawls in their bars spending money.

“We never have used them - never will and never have.”

Carnage Magaluf has said it is collaborating with the local authorities to make sure that similar scenes are not repeated.

The town hall of Calvia, which has responsibility for Magaluf, announced last week that pub crawls will now require a licence and groups will be limited to a maximum of 50 people each.

But Craig Crompton, a 26-year-old DJ from Runcorn in Cheshire who works on the strip, said: “What the authorities should be focusing on is the prostitution in the streets, that’s the worst thing in Magaluf.

“It’s not prostitution, they are mugging people and attacking people and now because of this you have got police chasing bar crawls when they should be chasing prostitution.”